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need right of my question thank you Illustration 40. 056 A, B and C were in partnership sharing profits in the proportion of 5:4:3. The

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need right of my question thank you

Illustration 40. 056 A, B and C were in partnership sharing profits in the proportion of 5:4:3. The Balance Sheet of the firm as on 31st March, 2013 was as under: Liabilities Amount Assets Amount Capital Accounts: Goodwill 40,000 A 1,35,930 Fixtures 8,200 B 95,120 Stock 1.57,300 61.170 Sundry Debtors 93,500 Sundry Creditors 41,690 Cash 34,910 3,33,910 3,33,910 A had been suffering from ill-health and gave notice that he wished to retire. An agreement was, therefore entered into as on 31st March, 2013, the terms of which were as follows: (i) The Profit & Loss Account for the year ended 31st March, 2013, which showed a net profit of 348,000 was to be reopened. B was to be credited with 4,000 as bonus, in consideration of the extra work which had devolved upon him during the year. The profit sharing ratio was to be revised as from 1st April, 2012 to 3:4:4. () Goodwill was to be valued at two years' purchase of the average profits of the preceding five years. The Fixtures were to be revalued by an independent valuer. A provision of 2% was to be made for doubtful debts and the remaining assets were to be taken at their book values. (i) The valuations arising out of the above agreement were Goodwill 56,800 and Fixture : 10,980. (iv) Band C agreed, as between themselves, to continue the business, sharing profits in the ratio of 3:2 and decided to eliminate Goodwill from the Balance Sheet, to retain the Fixtures on the books at revised value, and to increase the provision for doubtful debts to 6%. You are required to submit the Journal Entries necessary to give effect to the above arrangement and to draw up the Capital Accounts of the partners after carrying out all adjustment entries as stated above

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